Correlation Between INTER CARS and Coor Service
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Coor Service at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining INTER CARS and Coor Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Coor Service Management, you can compare the effects of market volatilities on INTER CARS and Coor Service and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in INTER CARS with a short position of Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Coor Service.
Diversification Opportunities for INTER CARS and Coor Service
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTER and Coor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management and INTER CARS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on INTER CARS SA are associated (or correlated) with Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of INTER CARS i.e., INTER CARS and Coor Service go up and down completely randomly.
Pair Corralation between INTER CARS and Coor Service
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.62 times more return on investment than Coor Service. However, INTER CARS SA is 1.62 times less risky than Coor Service. It trades about -0.05 of its potential returns per unit of risk. Coor Service Management is currently generating about -0.04 per unit of risk. If you would invest 11,500 in INTER CARS SA on August 25, 2024 and sell it today you would lose (740.00) from holding INTER CARS SA or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Coor Service Management
Performance |
| Timeline |
| INTER CARS SA |
| Coor Service Management |
INTER CARS and Coor Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Coor Service
The main advantage of trading using opposite INTER CARS and Coor Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Coor Service can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Coor Service will offset losses from the drop in Coor Service's long position.| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. Origin Agritech |
| Coor Service vs. Dairy Farm International | Coor Service vs. Grupo Carso SAB | Coor Service vs. INTER CARS SA | Coor Service vs. Algonquin Power Utilities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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